Qui Tam Whistleblower Lawyer
Eastern District of Michigan Declines to Reseal Qui Tam for Possible Criminal Prosecution
After the Government declined to intervene in United States ex rel. Arkfield v. Bleiberg, 2008 U.S. Dist. LEXIS 40131 (E.D. Mich. May 19, 2008), the case was unsealed so that the Relators could pursue the claims themselves, as is customary. The Relators, however, filed a motion to reseal the case so that they could present it to the criminal division of the United States Attorneys Office for possible criminal prosecution.
Medicare Billed $92 Million from Deceased Doctors
Category: Settlements and Verdicts
According to the US Senate Permanent Subcommittee on Investigations, between $60.3 million and $92.8 million in Medicare payments were made using the Unique Physician Identification Numbers ("UPINs") of deceased doctors. CMS recently changed procedures to prevent such abuse. The report states that CMS has taken further precautions to thwart more fraud from happening, including replacing the UPIN system with a National Provider Identifier (NPI) for all Medicare providers which took effect in May. The NPIs are cross-referenced with Social Security records to help prevent fraud.
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District Court of Massachusetts applies Rule 9(b) to FCA §§ 3729(a)(2) and (a)(3)
After having their FCA claims dismissed for lack of specificity in pleading pursuant to Rule 9(b), the relators of United States ex rel. Gagne v. City of Worcester, 2008 U.S. Dist. LEXIS 53742 (D.C. Mass. July 19, 2008), moved for reconsideration, contending that the court erred in applying Rule 9(b) particularity requirements to claims brought under §§ 3729(a)(2) and (a)(3). Citing the First Circuit's decision in United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st Cir. 2007), the district court denied relators' argument that Rule 9(b) did not apply to a § 3729(a)(2) claim. Further, although the First Circuit had not addressed the applicability of Rule 9(b) to a § 3729(a)(3) conspiracy claim, the District Court of Massachusetts looked to other circuits in concluding that Rule 9(b)'s particularity requirements applied to that subsection of the FCA as well.
5th Circuit Requires Bad Faith for Award of Attorney's Fees Against Government
In overturning an award of attorney's fees against the government in a qui tam action, the Fifth Circuit emphasized that a claim must have been brought in bad faith in order for such sanctions to be warranted. United States v. Medica-Rents Co., 2008 U.S. App. LEXIS 17946 (5th Cir. Aug. 19, 2008).
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$9.3 Billion Recovered in Whistle-Blower Cases
Category: Settlements and Verdicts
According to a report published in the Annals of Internal Medicine, $9.3 billion has been recovered with the help of whistle-blowers filing lawsuits against healthcare providers and drug companies who have allegedly defrauded the government. Ninety percent of healthcare fraud cases are initiated by whistle blowers who file complaints under seal in federal court. The Department of Justice has an opportunity to review and investigate the claims and determine if they want to join the suit. Generally, whistle-blowers receive between 15%- 20% of the DOJ's amount recovered.
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Lead Based Paint Not "Material" to HUD, says the 5th Circuit
Category: Legal Analysis
In news that will surprise many, if not all, Houston-area families, whether a house is contaminated by lead based paint is not "material" to the federal, state or local programs that provide aid to low income families in Houston - no matter what the City of Houston Housing and Community Development Agency has to say about the matter. At least, that's what the Fifth Circuit found in a per curiam opinion filed April 18, 2008.
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Miami Man Pleads Guilty in $3 Million Medicare Fraud Scheme
Category: Settlements and Verdicts
Juan Carlos Castaneda, a Miami resident, pleaded guilty on August 29, 2008 to allegations of Medicare fraud in excess of $3 million. Castaneda also admitted to assisting Dilcia Marinez and others in a Medicare money laundering scheme through G&S Medical Center, Inc, a Miami HIV treatment clinic. One million eight hundred thousand dollars of the Medicare fraud funds were laundered through G&S by submitting false claims to Medicare and by writing checks drawn from G&S's accounts to various companies, most of which were fake companies. The checks would be made out in amounts under $10,000 so as not to alert authorities. Castaneda also admitted involvement in another money laundering scheme with Best Medical Inc. by submitting fraudulent invoices to Medicare for HIV infusion services that were never provided or were medically unnecessary.
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Sixth Circuit Continues to Insist on "Claims" in U.S. ex rel. SNAPP, Inc. v. Ford Motor Company, 532 F.3d 496 (6th Cir. 2008)
Category: Legal Analysis
Once again, the stubborn judicial insistence on the magical "claim" to satisfy the requirements of Rule 9(b) has felled another detailed complaint. In this instance, despite a detailed exposé of a fraud by one of the participants, the relator's inability to produce a claim led to dismissal under Rule 9(b).
Second Circuit Applies 30-day Filing Period for Notices of Appeal in Unintervened Qui Tams
Category: Legal Analysis
On August 19, 2008, the Second Circuit was faced with the issue of whether a notice of appeal for an unintervened qui tam must be filed within thirty days, as is generally applicable to civil actions, or within the sixty days allowed when the United States is a party. In U.S. ex. Rel. Eisenstein v. City of New York, the Court held that the United States is not a party to a qui tam action where it fails to intervene, and so the Relator must file his notice within thirty days. Because Eisenstein filed his notice of appeal fifty-four days after his complaint was dismissed, the Second Circuit dismissed the appeal as untimely.
General Dynamics To Pay $4 Million To Settle False Claims Act Allegations
Category: Settlements and Verdicts
General Dynamics Corp. will pay $4.06 million to the U.S. government to settle allegations of fraudulent billing to the government for parts used in military aircraft by one of its subsidiaries.
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$2.1 Million Settlement By BlueCross BlueShield for False Claims Act Allegations
Category: Settlements and Verdicts
BlueCross BlueShield of Tennessee (BCBS-T) agreed on August 11, 2008, to pay $2.1 million to the United States to settle allegations that it violated the False Claims Act. Specifically, BCBS-T settled claims that between 2000 and 2002, the Medicare Part A Fiscal intermediary for New Jersey did not adjust cost-to-charge ratios for Hospitals in the state. The result was "outlier payments" by Medicare to those hospitals and facilities. Outlier payments are supplemental reimbursement payments by Medicare to hospitals where the cost for care is high.
U.S. v. Bourseau et al.: Ninth Rejects Presentment Requirement Under FCA 3729(a)(7)
Category: Legal Analysis
In affirming a decision from the United States District Court for the Southern District of California, the Ninth Circuit recently lined up with the Sixth to find that, by the plain language of the statute, presentment is not a requirement under § 3729(a)(7) but that materiality (using the "natural tendency test") is a requirement of the FCA. The Court also rejected an excessive fines challenge.
$35.2 Million to be Paid by WellCare in Medicaid Fraud Investigation
Category: Settlements and Verdicts
WellCare has agreed to pay a total of $35.2 million for Medicaid fraud stemming from claims in 2002 through 2006. Their payment includes $24.5 million in Medicaid repayments and $10.7 million remaining will be put into escrow until investigators complete the fraud inquiry. The repayment does not settle the investigation.
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BlueCross BlueShield of Tennessee to Pay $2.1 Million to U.S. Under the False Claims Act
Category: Settlements and Verdicts
BlueCross BlueShield of Tennessee (BCBS-T) has settled with the United States in the amount of $2.1 million regarding allegations of violating the False Claims Act. BCBS-T is headquartered in Chattanooga, TN and operates as Riverbend Government Benefit Administrators.
Medicare Fraud Fugitive Problem Increases
Category: Settlements and Verdicts
Since 2004, fifty-six fugitives have been charged with filing at least $272 million in fraudulent Medicare claims in the Miami-Dade area. Thirty-three of the fugitives are Cuban immigrants who escaped justice using Cuban Passports.
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$260,568 to be Repaid Under False Claims Act
Category: Settlements and Verdicts
Everett Wilson, a 60 year old Chatauqua County New York resident, has reached a settlement to repay $260,568 under the False Claims Act. Wilson used two Social Security numbers between 1993 and 2006, fraudulently receiving $86,856. U.S. Attorney Terrance P. Flynn said "The resolution of this case resulted in treble damages payable to the Social Security Administration."
Pratt & Whitney Agree to Pay More Than $52 Million in Settlement
Category: Settlements and Verdicts
Pratt & Whitney and one of its subcontractors, PCC Airfoils LLC, has agreed to pay the United States over $52 Million in a False Claims Act settlement for a case which alleged that the companies deliberately sold defective turbine blade replacements for jet engines used in military aircraft.
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Fraud costs the Military Health Insurance Program more than $100 Million
Category: Settlements and Verdicts
The United States military's health insurance program has been defrauded for more than $100 million during the past 10 years. Doctors, hospitals and clinics in the Philippines have plotted with U.S. veterans to submit false health claims.
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Medicaid Fraud Allegations Settle, Walgreens Pays $35 Million
Category: Settlements and Verdicts
The Pharmacy America Trusts settled allegations by a whistleblower pharmacist by paying $35 million. The suit alleged that Walgreens knowingly defrauded Medicaid by switching prescriptions for ranitidine, the generic form of the brand-name drug Zantac®, and fluoxetine, the generic form of Prozac®.
Qui tam Relator Bernard Lisitza, on behalf of the United States, 42 states and Puerto Rico, alleged that Walgreens unlawfully caused its pharmacies to switch prescription Medicaid patients from ranitidine tablets to ranitidine capsules, and from fluoxetine capsules to fluoxetine tablets.
The alleged fraud lasted for more than four years, from July 16, 2001 through December 31, 2005. The Relator brought the Complaint in 2003, under qui tam provisions of federal and state False Claims Acts.
The investigation and prosecution was led by the Attorneys General of the 42 states. Relator Lisitza pursued the case with the assistance of his attorneys, Michael I. Behn and Linda Wyetzner, of Behn & Wyetzner, Chartered, Chicago.
Four Florida Men Charged With $110 million In False Medicare Claims
Category: Settlements and Verdicts
Carlos, Jose and Luis Benitez, along with Thomas McKenzie, a physician's assistant, were charged with money laundering by the Department of Justice's Criminal Division and the U.S. Attorney's Office for the Southern District of Florida. The four allegedly made more than $110 million worth of false claims to Medicare between 2001 and 2004.
According to the indictment, two of the brothers, Carlos and Luis Benitez, paid Medicare beneficiaries at eleven clinics they oversaw to submit claims for HIV infusion services that were neither provided nor medically necessary. The physician's assistant, Thomas McKenzie, allegedly trained staff on how to prepare and submit false claims to Medicare.
Prosecutors in this case asked that the suspects receive up to 155 years imprisonment for Carlos and Luis Benitez, the maximum sentence of 40 years of imprisonment for Jose Benitez, and 50 years for Thomas McKenzie.
Philadelphia U.S. Attorney Announces $700,000.00 Settlement Linked To Personal Care Facilities
Category: Settlements and Verdicts
Pat Meehan, U.S. Attorney in Philadelphia, announced that his office has reached a $700,000 civil settlement with Ivy Ridge Personal Care Center, Inc., Brookwood Personal Care Home, Inc., Conlyn House, Inc., Throughgood, Inc. Health Horizons Unlimited, Inc. and owner Rosalind S. Lavin.
No More Medicaid Reimbursements in New York for Avoidable Errors and "Never Events"
Category: Qui Tam Legal News
Commencing in October 2008, New York hospitals will be denied reimbursement on 14 "never events" from the New York Medicaid program. "Never events" are defined as (a) avoidable hospital complications, including medical errors, (b) which are serious in consequences to patients, that are (c) identifiable and (d) preventable. In his announcement of the change, state Health Commissioner Richard F. Daines, M.D. stressed that this policy been put in place to improve healthcare quality, reduce medical errors and ensure patient safety.
Lockheed Martin Pays $10.5 Million to Settle False Claims Act Case
Category: Settlements and Verdicts
Lockheed Martin Space Systems, a Denver-based division of Lockheed Martin Corporation, has settled a False Claims Act case for $10.5 million resulting from allegations that Lockheed had submitted invoices for payment it was not entitled to receive.
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Bristol-Myers Squibb Co. ("BMC"), and its subsidiary, Apothecon, agreed to pay $515 million to settle allegations relating to pricing practices and drug marketing.
Category: Settlements and Verdicts
According to the government, BMS paid illegal kickbacks to physicians from 2000 to mid-2003, in order to get the physicians to promote BMS drugs. These payments were in form of consulting fees and other programs, of which some involved travel to extravagant resorts.
Allegations centered around the use and sale of the drug Abilify, an atypical antipsychotic drug. BMC allegedly encouraged Abilify's use as a pediatric drug and for dementia-related psychosis, both of which are "off-label" uses. A drug's use is considered off-label when it has not been approved by the FDA for that particular use. Here, Abilify has been approved to treat adult psychiatric disorders but not for the use in children or teenagers or for dementia-related illnesses.
Although doctors are permitted to prescribe drugs with or without FDA-approval for that particular use, companies are forbidden to promoted drugs for off-label uses.
U.S. Achieves $6.7 million settlement in healthcare fraud case in Florida.
Category: Settlements and Verdicts
On May 12, 2008, Broward County doctor, Aleyda Borge, M.D., along with the operators of Leonza Health Management Group, settled with the federal government for $6.7 million on allegations of healthcare fraud.
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